So I went to the Alberta Government Treasury Branch the other day to get some cash out of the instant teller. Now I belong to a credit union and so as usual this would mean an Interact service charge anywhere from $1.50-$2.5o. So I ask for $40 and get $40 and on the receipt I find there is NO SERVICE CHARGE. Damn right.
ATB was created as a People Bank by the Social Credit Government in 1938 to counter the Eastern Banking Monopoly and for the creation of Funny Money in order to offset the massive debt and depression affecting the province.
There is great irony that the Alberta Treasury Branches still operate in Republican Lite Alberta. They are unionized, the only unionized banking system in Canda!
The credit union movement in Quebec Cassie du Populaire is close to the ATB model of the peoples bank though it is more of a federated peoples bank as adovacted by mutualists and Proudhon.
The provincial ATB's have low interest rates for citizens banking with them. And they have minimal service charges, like none on Interact banking through the ATM. This is unique since both banks and credit unions charge service charges.
And that fact is amazing because that is where we as consumers get ripped off. We pay exorpident services charges above the actual cost of maintaining the local ATM and the Interact/Plus network that is owned and operated by the Banks! The bank workers get ripped off because ATM's have seen a reduction in teller services.
With electronic transfers of social welfare benefits to banks the poor face a dispraportionate disadvantage of being taxed with user fees/service charges on their accounts.
Like the perennial debates in the House of Commons on gas prices, banking charges are another of those debates that parliament can never resolve. Even as they discuss allowing for bank mergers. Which as documentation shows have increased across North America over the past two decades, with no reductions in service charges or savings to depositors or borrowers.
So why are we being ripped off, paying for service charges for use of ATM's then paying for using the ATM when it is not our bank, while Interac, ATMs etc are all controled by the banks.
In Europe last week the EU announced that it was looking into regulating Master Card and Visa, both controled by the banks as well, due to excessive and profit gouging by the banks and the credit card companies they own.
The report found:
* Credit card charges to retailers add an average of 2.5% to the cost of goods.
* Small and medium businesses pay up to 70% more than large companies for offering credit card payments.
* Consumers pay 100% more for MasterCard and Visa in some countries than in others
While this was report on Europe the same can be said for the North American marketplace.
The banks use the excuse that their costs are the techonology and start up costs. However those costs began over twenty years ago, and are no longer real costs of doing business.
Since these fees hurt customers as well as business, which is charged a service charge for bank cards as well as credit cards, when will we hear from the CFIB and the Canadian Taxpayers Federation, along with consumer advocates and unions about how we are being ripped off by the banks?
If you want to put real money in your pocket, as the on line no service charge bank ING says, then its time we ended service charges for Interac banking and on Credit Cards. Service charges that are tacked on over and above interest payments by Visa and Mastercard.
So if the ATB can not charge me for Interac banking why can't the rest of them?
Again a failure of the ideology of competition, obviously in this case the taxpayers citizens of Alberta underwrite this competitive advantage while the rest of the financial industry goes on its merry way gouging us.
Canada's Office of Consumer Affairs says ATM fees on the rise ...
Overview of the ATM and Debit Card Industry
"Rip-Off" ATM Surcharges
Nadia Massoud, Dan Bernhardt
RAND Journal of Economics, Vol. 33, No. 1 (Spring, 2002) , pp. 96-115
Fees and surcharging in automatic teller machine networks:
Non-bank ATM providers versus large banks
ATM networks were initially developed as a means by which banks could save costs by shifting
customers from costly “teller” transactions using personnel at a branch to the use of machines. In the early 1980s in North America, these initially proprietary systems evolved into shared networks, which enhanced customer convenience in accessing their account, without having to go to their branch. A main fee set by the (shared) network is an “interchange fee” that banks must pay to other member firms for each “foreign” transaction made by one of their customers at another member’s ATM. In order to recover at least part of the cost, banks typically charge their own customers a “foreign fee” for these transactions. In addition to the foreign fee, customers making foreign ATM transactions may pay a “surcharge” directly to the owner of the ATM. This fee structure has the interesting and unusual feature that all three fees apply to the same transaction.
Harming Depositors and Helping Borrowers: The Disparate Impact of Bank Consolidation
Recently, banking has experienced rapid consolidation in many countries. For banks in the United States, corporate restructurings have been driven by advances in information technology and by a loosening of geographic restrictions on branching and acquisitions. The number of U.S. commercial banks declined from 14,469 in 1984 to 7,888 in 2002, while the average asset size of banks has more than tripled over this period, from $268 million to $897
The Welfare Consequences of ATM Surcharges: Evidence from a Structural Entry Model
The goal of this paper is to estimate a structural model of the market for automatic teller
machines (ATMs) in order to understand the implications of regulating ATM surcharges on
ATM entry and consumer welfare.
Since the establishment of the first ATM networks in the early 1970s, ATMs have
become a ubiquitous and growing component of consumer banking technology. By 2001, there
were over 324,000 ATMs in the United States, processing an average of 117 transactions per
day, suggesting that each person in the United States uses an ATM an average of 45 times per
In spite of the vast and growing presence of ATMs, product differentiation may imply
that the market for ATMs does not reflect perfect competition or yield optimal outcomes. In
particular, the surcharge—the price charged by an ATM on top of the set interchange fee—has
increased significantly over the last several years. The increase can be linked to an April 1996
decision by the major ATM networks to allow surcharges among their member ATMs.2 Between 1996 and 2001, the number of ATMs tripled, but the number of transactions per ATM fell by about 45 percent. The technology of ATMs is characterized by high fixed costs—primarily the cost of leasing the machine, keeping it stocked with cash, and servicing it—and very low marginal costs. Thus, the increased price of ATM services has been accompanied by an increased average cost per ATM transaction.
A History of Canadian Wealth, 1914.
The Peoples Bank of Alberta
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